PPC.L Regulatory News (PPC)

6 Sep 2007 07:01

Meridian Petroleum PLC06 September 2007 6 September 2007 AIM: MRP Meridian Petroleum plc ("Meridian" or the "Company") Interim Results and Operations Update Meridian Petroleum (AIM: MRP), the independent oil and gas exploration andproduction company with key assets in the USA and Australia announces itsinterim results for the six months to 30 June 2007 and an update on itsoperations. Operational Highlights •Native Title to South Australian Licences executed in April 2007 •New Chairman appointed •Lease agreement executed at CBM project in Alabama, January 2007 •Three US gas wells progressed towards production: •Calvin 36-1 (NRI 68.75%) - initial production July 2007 •Milford 36 (NRI 29%) - to be put on test September 2007 •Orion 36 (NRI 75%) - initial production August 2007, brought on stream in seven months. Financial Highlights •US $3.4 million (£1.78 million) raised from share placing •Capital expenditure of US $2.3million (H1 2006 US $0.5million) •Operating loss US $1.4million (H1 2006 $0.8million) Chairman's Statement The primary focus of our activity during the first half of 2007 was to generaterevenue as quickly as possible from our US gas assets of Orion, Calvin andMilford. In particular, the Company invested significantly in the drilling andthe extensive processing facilities that brought the Orion 36 well on-stream inless than seven months. As a result of these activities, the Company has now achieved first gas fromOrion 36 and Calvin 36-1, and it will put the Milford well on extended testshortly. Whilst the prospects for meaningful levels of production from Milfordremain reasonable, the Calvin 36-1 well has been very disappointing and acontinuing source of frustration to the Company and its shareholders. With the major focus on achieving production and cash-flow, the Company madesteady but limited progress during the first half in taking forward plans forits other assets: the Australian licences, the deep gas in the Calvin field, andthe Coal Bed Methane project at Warrior Basin in Alabama. In April the government of South Australia executed the Native Title agreementon the PEL-132 licence which contains the Dolores gas prospect. More recently,the Company has completed a thorough review of the seismic data for the PEL-82licence, and this has identified an area of significant oil-bearing potential.Our strategy for developing our Australian assets is now likely to involveseparate plans, and possibly separate partners, for the gas and oil prospects. The Board has focused the Company's resources on moving from being an earlystage producer to having the capability to exploit larger opportunities.Although we remain excited by the longer-term potential of Coal Bed Methane, wehave decided to concentrate our next efforts on the deep gas opportunities inthe Calvin Field. RPS Scott Pickford has identified contingent gas reserves ofsome 100bcf in the Terryville A & B Sands at a depth of some 12,800 feet. Theboard believes that it can add substantial value to shareholders by targetingearly production from these sands and taking these reserves from category P2 toP1. In discussion with our operator, West Mountain, we intend to open up thesereserves by a re-entry of the 5-29 well, which is a relatively low-risk,low-cost approach. We have not yet had confirmation from our JV partners,Ensight, that they will participate in this well, but we intend to proceed withthe plan and subject to permit approval, the re-entry could commence early in2008. Our strategy for testing the much larger, high-pressure, potentialreserves in the deeper Calvin zones remains under discussion with Ensight. Stephen GutteridgeChairman6 September 2007 Operations Update Orion 36 The Company announced earlier this week that it would be necessary to take theOrion 36 well off-line for a short period to remedy problems caused by smalltraces of mercaptans in the gas stream. The Company also indicated that it woulduse the opportunity of the downtime to effect further perforation of thereservoir and maximise reservoir potential. This will involve the same processof both conventional and explosive perforation as utilised successfully on theMilford 36 well. Having now located all of the appropriate equipment, the well will be takenoff-line at daybreak US time today, 6 September and is expected to be backon-stream this weekend. Calvin 36-1 We have now observed the performance of this well for a full month and it isclear that production will not improve under natural flow, and average outputhas dropped below 50mcfd in recent days. We are currently assessing a remedialplan to boost output, devised in conjunction with our engineers, West MountainOperating. Milford 36 The extended 30 day test of this well, operated by Wellmaster, the operator ofOrion 36, is now expected to commence in mid September. The objective of thetest is to clearly define the extent of the oil column identified and to betterdevelop bottom hole pressures and flow rates. Full financial statements follow. ENDS For further information contact: Meridian Petroleum Plc Ambrian Partners Parkgreen CommunicationsStephen Gutteridge, Chairman Tim Goodman Simon Robinson+44 (0) 20 7811 0140 Richard Greenfield Erica Nelson +44 (0) 20 7776 6400 +44 (0) 20 7851 7480 Tony Mason, CEO+1 713 599 1611 About Meridian Petroleum plc Meridian Petroleum is an oil and gas exploration and production company with keyon-shore assets in the United States and Australia. Meridian is quoted on theAIM market of the London Stock Exchange (ticker: MRP), and is headquartered inLondon, with offices in Houston, Texas and Adelaide, Australia. Consolidated Income Statement 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000 Revenue 2 7 8Cost of sales - production costs (19) (30) (63) --------- --------- ---------Gross loss (17) (23) (55)Administrative expenses (1,340) (783) (1,845)Impairment charge - - (4,065) --------- --------- ---------Operating loss (1,357) (806) (5,965)Investment Income - interest on 19 14 21 bank deposits --------- --------- ---------Loss on ordinary activities (1,338) (792) (5,944) before and after taxation ========= ========= =========Loss per share (cents) Note 3 (1.7) (1.1) (8.3) Consolidated Statement of Total Recognised Income and Expenditure 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000 Loss for the financial period (1,338) (792) (5,944)Currency translation differences (196) 99 105 - (loss) / gain --------- --------- ---------Total gains and losses recognised (1,534) (693) (5,839) since last financial statements ========= ========= ========= Consolidated Balance Sheet 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000Non-current assetsIntangible assets: 1,005 546 646Property, plant and equipment 3,934 5,776 2,020 --------- --------- --------- 4,939 6,322 2,666 Current AssetsTrade and other receivables 376 224 234Cash and cash equivalents 2,622 1,526 2,332 --------- --------- --------- 2,998 1,750 2,566 --------- --------- ---------Total assets 7,937 8,072 5,232 --------- --------- ---------Current liabilitiesTrade and other payables (857) (375) (211) --------- --------- ---------Total liabilities (857) (375) (211) --------- --------- ---------Net Assets 7,080 7,697 5,021 ========= ========= =========EquityCalled up share capital 9,013 6,681 7,362Share premium 8,359 4,915 6,565Retained earnings (10,495) (4,005) (9,157)Translation reserve (84) 106 112Other reserves - share based 287 - 139 payments --------- --------- ---------Total equity attributable to 7,080 7,697 5,021 the equity holders ========= ========= ========= Consolidated Cash Flow Statement 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000Cash flows from operating activitiesCash consumed by operations - Note 4 (1,013) (808) (2,055)Interest received 19 14 21 --------- --------- --------- (994) (794) (2,034) --------- --------- ---------Cash flows from investing activitiesExpenditure on exploration and (359) (122) (459) evaluation assetsExpenditure on development and (1,914) (378) (450) production assets --------- --------- --------- (2,273) (500) (909) --------- --------- ---------Cash flows from financing activitiesProceeds from issue of shares 3,445 2,354 4,686 --------- --------- ---------Net increase in cash and cash equivalents 178 1,060 1,743Opening cash and cash equivalents at 2,332 370 370 beginning of yearExchange gains on cash and cash 112 96 219 equivalents --------- --------- ---------Closing cash and cash equivalents 2,622 1,526 2,332 --------- --------- --------- Notes 1. Basis of preparation and accounting policies The interim financial statements for the six months to 30 June 2007 have beenprepared on the basis of the accounting policies set out in the Company'sfinancial statements for the year ended 31 December 2006. These accountingpolicies are drawn up in accordance with International Accounting Standards(IAS) and International Financial Reporting Standards (IFRS) as issued by theInternational Accounting Standards Board. The financial information for the six months ended 30 June 2007 and 30 June 2006was neither audited nor reviewed by the auditors and does not constitutestatutory accounts as defined in section 240 of the Companies Act 1985. A copyof the statutory accounts for the year to 31 December 2006 has been delivered tothe Registrar of Companies. The auditors' report on those accounts wasunqualified and did not contain statements under section 237 (2) or (3) of theCompanies Act 1985. 2. Segmental reporting In the opinion of the Directors the operations of the Group comprise one classof business, oil and gas exploration, development and production and the sale ofhydrocarbons and related activities. The Group currently operates in onegeographical market, the USA, and has a head office and associated corporateexpenses in the UK. 3. Loss per share 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000Loss for the period US $'000 (1,338) (792) (5,944)Weighted average number of 80,860 69,743 71,311 shares in issue ('000) --------- --------- ---------Loss per share (cents) (1.7) (1.1) (8.3) --------- --------- --------- Notes (continued) 4. Reconciliation of operating loss to net cash outflow from operatingactivities 30 June 2007 30 June 2006 31 Dec 2006 (Unaudited) (Unaudited) Audited US $'000 US $'000 US $'000Loss from operations (1,357) (806) (5,965)Adjustments for :Depreciation and impairment of - - 4,065 property, plant and equipmentShare based payment 148 - 139Foreign exchange difference (310) 9 (113) --------- --------- --------- (1,519) (797) (1,874)Increase in debtors (138) (77) (80)Increase/(decrease) in creditors 644 66 (101) --------- --------- --------- (1,013) (808) (2,055) ========= ========= ========= 5. Retained Earnings and other reserves Share Share Retained Foreign Other Total Capital Premium Earnings currency reserves reserves US $'000 US $'000 US $'000 US $'000 US $'000 US $'000Balance at 1 7,362 6,565 (9,157) 112 139 5,021January 2007Shares issued 1,651 1,794 - - - 3,445Total - - (1,338) (196) - (1,534) Recognised income and expenseShare based - - - - 148 148 payments ------- ------- ------- ------- ------- -------Balance at 9,013 8,359 (10,495) (84) 287 7,080 30 June 2006 ======= ======= ======= ======= ======= ======= This information is provided by RNS The company news service from the London Stock Exchange